The Economics of Donations and Enlightened Self‐Interest

32 Pages Posted: 12 Dec 2013

See all articles by Andrea Buraschi

Andrea Buraschi

Imperial College Business School; Centre for Economic Policy Research (CEPR)

Francesca Cornelli

London Business School; Centre for Economic Policy Research (CEPR)

Date Written: January 2014

Abstract

We use a unique dataset from the English National Opera to study what motivates individuals to donate. The data includes both attendance and benefits (granted and consumed) by all donors. We find that individuals clearly respond to incentives. However, only some individuals are motivated exclusively by private benefits. Some individuals are willing to fund public goods, even though they could free‐ride. Moreover, donors who attend special events or new productions develop loyalty and increase their donations over time. Finally, individuals are sensitive to social pressure and network connections. These results can help charities to refocus the design of their fund‐raising.

Keywords: donations, charity, altruism

Suggested Citation

Buraschi, Andrea and Cornelli, Francesca, The Economics of Donations and Enlightened Self‐Interest (January 2014). European Financial Management, Vol. 20, Issue 1, pp. 1-32, 2014. Available at SSRN: https://ssrn.com/abstract=2366592 or http://dx.doi.org/10.1111/j.1468-036X.2013.12030.x

Andrea Buraschi (Contact Author)

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

HOME PAGE: http://www.andreaburaschi.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Francesca Cornelli

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
+44 20 7262 5050 x3225 (Phone)
+44 20 7724 3317 (Fax)

HOME PAGE: http://www.lbs.ac.uk/faculty/fcornelli/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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